[Update] Nelnet (NNI)
Nelnet just keeps getting better.
If you enjoy this post, you might like my other Nelnet write-up here:
If you’ve been around here a while, you already know Nelnet has held a spot on my short list of “boring” compounders I’d happily own forever.
This is a company run by owner-operators with a ton of skin in the game. They don’t chase fads, they don’t overextend, and they have a long track record of allocating capital with precision.
Over time, that combination has steadily driven book value per share higher while also returning capital to shareholders through buybacks and dividends.
This quarter (Q2, 2025) was no different.
The big headline was the partial redemption of Nelnet’s ALLO stake. They brought in $410.9 million in cash, booked a $175 million pre-tax gain, and reduced their voting stake from 45% to 27%.
They still hold that remaining stake, and true to form it’s carried at zero on the balance sheet. That’s despite its estimated value being around $253 million.
It’s a perfect example of why I love this management team. They’re smart, conservative, and never play games with the numbers. By valuing the stake at zero, they’re not giving themselves credit for something they haven’t realized yet, keeping expectations grounded while quietly preserving meaningful upside for shareholders.